Under a self-funding arrangement, what may large employers opt for in addition to self-insuring?

Large employers under a self-funding arrangement often choose to contract for administrative services only (ASO). This option allows them to self-insure their health coverage while outsourcing the administration of the plan to a third-party administrator (TPA). The TPA manages claims processing, customer service, and other administrative tasks, enabling the employer to retain control over the financial risk associated with claims.

Choosing ASO is beneficial because it allows the employer to maintain the flexibility and potential cost savings that come with self-funding while alleviating the operational burden of running a health plan. This combination provides the employer with both the fiscal oversight of a self-insured plan and the professional expertise needed to efficiently handle administrative tasks.

The other options, while they could theoretically be considered in certain contexts, do not typically align with the common practices associated with self-funding. For instance, full funding of all claims would negate the advantages of self-funding, and eliminating health coverage would not be a viable choice for employers seeking to provide employee benefits. Establishing minimal participation requirements may be relevant in different contexts but does not specifically relate to the option of self-funding in combination with administrative services.